Wednesday, August 13, 2008

Alan Greenspan has an Idea

In an interview in today's Wall Street Journal:

He also offers a novel suggestion to bolster the housing market: Increase the number of potential home buyers by admitting more skilled immigrants.

I have actually wondering whether enforcement of immigration laws within the last year has worsened the housing situation in Arizona, Nevada, and the California Inland Empire. While overbuilding, undisciplined lending, and speculation are all at fault for the mess we are in, I can't help but wonder if lower levels of immigration in the Southwest haven't matter as well.

Neither McCain nor Obama seems particularly interested in keeping immigrants out of the country, so it will be interesting to see what happens to housing absorption in 2009.


Anonymous said...

In my econ classes, we were taught that there is no such thing as a labor shortage - claims of a labor shortage mean that you cannot find what you want at the price you are willing to pay. It would seem that continuing to flood the market with immigrant labor (skilled or unskilled) would act as a labor price subsidy. As wages go down, even fewer could afford over priced homes. Seems like a zero-sum game.

Anonymous said...

I think Greenspan wants to increase the cost of housing by lowering the salaries of (mostly) high tech workers. It is amusing to watch economists invent ever more convoluted subsidy programs as they pick and choose to believe in free markets only some of the time. I favor abolishing tenure and let's see how many professors of economics then favor unlimited importation of workers from other countries.

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